Ecological Economics 29 (1999) 337 348

TENTH ANNIVERSARY INVITED PAPER

Toward consilience between biology and economics: the

contribution of Ecological Economics
John M. Gowdy a,*, Ada Ferreri Carbonell b
b

a
Department of Economics, Sage Hall, Rensselaer Polytechnic Institute, Troy, NY 12180, USA
Foundation of Economic Research, Uni6ersity of Amsterdam, Roetersstraat 11, 1018 WL Amsterdam, Netherlands

Received 17 June 1998; received in revised form 24 February 1999; accepted 9 March 1999

Abstract
During its ten year history Ecological Economics has made a real difference in the way economists look at the
natural world and in the way biologists look at the economy. In this survey article we examine the contributions to
the Journal in terms of E.O. Wilsons concept of consilience, that is, his argument that the methods and assumptions
of any field of study should be consistent with the known and accepted facts in other disciplines. In particular, we
examine the contributions of ecological economics to reconciling the economic theory of the consumer and producer
with biophysical reality. 1999 Elsevier Science B.V. All rights reserved.
Keywords: Biodiversity; Consilience; Environmental valuation; Evolutionary economics; Production theory; Scale;
Utility theory; Weak and strong sustainability

1. Introduction
In the first issue of Ecological Economics
Robert Costanza stressed that the new field ad* Corresponding author. Tel.: +1-518-276-8094; fax: + 1518-276-2235.
E-mail addresses: lgowdy@aol.com (J.M. Gowdy),
adaf@seo.fee.uva.nl (A. Ferrer Carbonell)

dresses the relationships between ecosystems and

economic systems in the broadest sense,
(Costanza, 1989p. 1). Also in that issue, Paul
Ehrlich (Ehrlich, 1989, p. 9) called for a deeper
level of cooperation between biologists and
economists: A certain frankness and willingness
both to give and to receive criticism (and to reject
erroneous criticism) is required if ecologists and
economistsbasically members of sister disci-

0921-8009/99/$ - see front matter 1999 Elsevier Science B.V. All rights reserved.
PII: S 0 9 2 1 - 8 0 0 9 ( 9 9 ) 0 0 0 3 5 - X

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J.M. Gowdy, A. Ferreri Carbonell / Ecological Economics 29 (1999) 337348

plinesare to forge an understanding that will

permit them to work together to solve the human
predicament. In the years since its birth Ecological Economics has attempted to reconcile not only
the conflict between economies and ecosystems,
but also to integrate the theoretical approaches of
biology and economics. This reconciliation requires a degree of interdisciplinarit that goes beyond mere cooperation between economists and
biologists. It requires that practitioners from one
discipline actually learn something about the theory and the content of the other discipline.
Ten years after Ecological Economics was
launched, the rest of the academic world seems to
be catching up to the original vision. It is clear
that we are on a wave of truly interdisciplinary
understanding and cooperation between biologists
and economists. Not surprisingly, support for
ecological economics among biologists continues
to be strong (Pimm, 1997; Ehrlich, 1997). The
basic concerns that led to the creation of ecological economics are now almost conventional wisdom in the scientific community. In her
Presidential Address to the American Association
for the Advancement of Science, the biologist
Jane Lubchenco, presented what amounts to a
manifesto for ecological economics:

As the magnitude of human impacts on the

ecological systems of the planet becomes apparent, there is increased realization of the intimate
connections between these systems and human
health, the economy, social justice and national
security. The concept of what constitutes the
environment is changing rapidly. Urgent and
unprecedented environmental and social
changes challenge scientists to define a new
social contract. This contract represents a commitment on the part of all scientists to devote
their energies and talents to the most pressing
problems of the day, in proportion to their
importance, in exchange for public funding.
The new and unmet needs of society include
more comprehensive information, understanding, and technologies for society to move toward a more sustainable biosphere one which
is ecologically sound, economically feasible, and
socially just. (Lubchenco, 1998, p. 491)

Biologists have now accepted the fact that we

cannot save the environment in isolation from
the other problems of economy and society, a
basic tenet of ecological economics (Daly, 1992).
Ecological economics is broader than nature conservation (Norton, 1995a).
Biologists and other scientists are beginning to
challenge mainstream economists to make their
theories more realistic. E.O. Wilson (Wilson,
1998, p. 197) writes:

They can be summarized in two labels: Newtonian and hermetic. Newtonian, because economic theorists aspire to find simple, general
laws that cover all possible economic arrangements. Universality is a logical and worthy
goal, except that the innate traits of human
behavior ensure that only a minute set of such
arrangements is possible or even probable...The
models also fall short because they are hermeticthat is, sealed off from the complexities
of human behavior and the constraints imposed
by the environment.
Wilsons categorization of economics is particularly relevant to the debate between economists
and ecologists regarding the valuation of ecosystem functions. Both the scientific findings of ecology and the theoretical approaches of that
discipline conflict with some of the basic assumptions of neoclassical economic theory. Scientific
findings from ecology show increasing tensions
between economic systems and ecological systems
(Ayres, 1993, Ayres, 1995; Farrow, 1995; Gowdy
and McDaniel, 1995). Ecological theory is also
important because it has the potential to revolutionize the way economists think about the economy and the natural world (Binswanger, 1993;
Costanza and Patten, 1995; Norton, 1995a; Lunney et al. 1997; Ring, 1997). Central to ecological
theory are concepts like irreversibility, uncertainty, and holism which can enrich and expand
the scope of economic theory.
It should be pointed out that not all agree that
there is a conflict between economy and ecology.
Vedeld (1994) argues that economy and ecology
do not deal with the same issues. Economists

J.M. Gowdy, A. Ferreri Carbonell / Ecological Economics 29 (1999) 337348

focus on the market as a supplier of advice about

human preferences, while ecologists study natural
systems and processes. The laws of economics and
the laws of ecology, he argues, are not contradictory, but rather incommensurable; they apply to
two different systems. This may be true of
neoclassical theory and biology, but most ecological economists would argue that economics
should be broadened to encompass more than the
study of market or pseudo-market values. Referring to the different subject matters of economics
and ecology, and to their areas of overlap,
Costanza (Costanza, 1989, p. 1) writes: Ecological Economics aims to extend these areas of overlap. It will include neoclassical environmental
economics and ecological impact studies as subsets, but will also encourage new ways of thinking
about the linkages between ecological and economic systems.
In this survey we focus on the contributions
this Journal has made during the last 10 years in
addressing Wilsons criticism of the hermetic nature of standard economics. We take as our starting point Wilsons argument that one feature of
any good scientific theory or model is consilience, that is, the assumptions of one branch of
knowledge should conform to the accepted facts
of other branches: Units and processes of a discipline that conform with solidly verified knowledge
in other disciplines have proven consistently superior in theory and practice to units and processes
that do not conform (Wilson, 1998, p. 198).
Using the issue of biodiversity as an example, we
show that ecological economics has come a long
way in addressing the issue of consilience raised
by Wilson. In the spirit of consilience, ecological
economists have expanded the subject matter of
utility theory by recognizing the complexity and
the social context of human behavior and likewise
have expanded the economic theory of production
by taking explicit account of the constraints imposed by the environment. Within ecological economics, human behavior is recognized as being
more than that of isolated individuals making
allocation decisions at the margin in well-organized markets. The issue of environmental constraints has been taken up in a variety of contexts
including the debate about the scale of economic
activity vis-a-vis the finite planet earth.

339

2. Production theory and the scale of economic

activity
The neoclassical theory of production is hermetic in the sense that economic production is
seen as a self-contained circular flow process unconnected to the anthropology, biology, or
physics of the rest of the world. In standard
economic theory, scarcities of particular inputs
are temporary and can be overcome by substitution driven by changes in relative prices (Amir,
1989; Klaassen and Opschoor, 1991; Victor, 1991;
Bromley, 1998). Unwanted effects of outputs of
the production process (externalities) also reflect
Pareto inefficient relative prices and can also be
taken care of within the market system. In contrast to this world view, a major concern of
ecological economics over the past decade has
been the issue of the scale of economic activity
viz-a-viz the global environment, an issue that was
virtually ignored until the pioneering work of
Boulding (1966) and Georgescu-Roegen (1971).
Georgescu-Roegens work has been the subject
of many articles in the Journal (Khalil, 1990;
Daly, 1995; Lozada, 1995) and a special issue
(September 1997) was dedicated to him. Unfortunately, very few students had the opportunity to
work directly with Georgescu-Roegen. Fortunately, one of those who did was Herman Daly.
Daly not only popularized Georgescus economic
theories, he also formulated a theory of his own
that was able to grab the imagination of a large
general audience, namely, the concept of the
steady-state economy. Dalys arguments about the
negative effects of economic growth have been
confirmed by scientific findings of the last 10 years
which have shown convincingly that economic
activity is changing many of the biophysical characteristics of the planet. Global climate change,
biodiversity loss, world-wide acidification of lakes
and streams, and rising nitrogen levels are only a
few of the negative global effects of human
activity.
The adverse impact of economic activity on the
earths biological diversity clearly illustrates the
relationship between the scale of economic activity and the limited ability of our planet to absorb
the effects of economic growth. The issue of bio-

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J.M. Gowdy, A. Ferreri Carbonell / Ecological Economics 29 (1999) 337348

diversity loss has been the subject of many articles

in Ecological Economics, articles that have made
the importance of preserving biodiversity a central
theme of ecological economics. The diverse justifications given for preserving biodiversity reflect the
pluralism and interdisciplinarity of ecological
economists. Some focus on ecological reasons:
maintaining ecosystem productivity (e.g. against
erosion, as a nutrient recycling or absorption of
CO2); maintaining ecosystem stability, and preserving the ability to keep a wide range of future
options open (Norton, 1989; Tisdell, 1990;
Stahler, 1994; Gowdy and McDaniel, 1995; Norton-Griffiths and Southey, 1995; Tacconi and
Bennett, 1995; Smith, 1996; Brown, 1998). Biodiversity has also been recognized as a key element
for the evolution or coevolution of socio-economic systems (Klaassen and Opschoor, 1991;
Norgaard, 1995).
Economic reasons for preserving biodiversity
include: maintaining the productivity of forest
and agricultural industries (as a future source of
inputs for the pharmaceutical or agriculture industries, the economic value of the aesthetic or
cultural aspects of biodiversity and as a income
source in the eco-tourism industry (Norton, 1989;
Tisdell, 1990; Stahler, 1994; Norton-Griffiths and
Southey, 1995; Tacconi and Bennett, 1995; Smith,
1996; Swanson, 1996; Fearnside, 1997; Brown,
1998).
Finally, from a philosophical point of view:
some argue that we should preserve biodiversity
because species have rights on their own or because we have a responsibility to leave bequests to
future generations (Norton, 1989; Tisdell, 1990;
Stahler, 1994 and Brown 1998) or that biodiversity loss has a negative impact on indigenous
people (Tacconi and Bennett, 1995).
With the growing evidence of the adverse human impact on the earths biological, geochemical, and atmospheric processes, driven by the
growth of the world market economy, it is clear
that the scale of human activity is an important
consideration in any complete and realistic economic theory (Daly, 1992; Schroder, 1995).
Neoclassical theory, with its exclusive emphasis
on allocation within well-defined markets, cannot
address the issue of the scale of economic activity

with respect to a finite environment. The importance of scale has been dismissed by some ecological economists. Duchin (1996) criticizes the
concept for not being operational, and Norgaard
(1995) maintains that the concept is too mechanical in that it does not take into account coevolutionary potential. Norgaard (Norgaard, 1995, p.
129) agrees, however, that the notion of limits is
far superior to that of non-limits. In spite of its
limitations the issue of scale is an idea that confronts head-on the conflict between the evolution
of market economies and evolutionary processes
in nature (Gowdy and McDaniel, 1995; Norton,
1995a; Ring, 1997; Luks, 1998).
Niles Eldredge (Eldredge, 1995, p. xv) links the
concepts of scale, evolution, and the global Gaia
to argue that the human species is evolving back
into a situation of nature-imposed constraints on
our activity: For 10 000 years, all but a remnant
handful of hunting-gathering societies have been
living outside the normal, local-ecosystem confines of nature. That is why our cultural heritage
proclaims us to be something apart from, even
over and above, the beasts of the field. But we
have now reached the next crucial phase: We ha6e
become the first species on earth to interact as a
whole with the global system. For about 99% of
our existence as a species we lived as hunters and
gatherers within the limits of local ecosystems.
With the adoption of agriculture, human societies
were able to exploit a variety of environments
and, as a result, human populations increased far
beyond those that could be supported using local
resources alone. With the industrial age, and the
dramatic increase in the scale of population and
economic activity, humans have re-emerged into a
world of limits. This makes the issue of scale
central to the relationship between biological and
economic systems.
Within the scale-of-human-activity debate two
approaches within ecological economics are apparent. These may be termed static and dynamic
approaches to the scale question. On the one
hand, there are those like Daly (and arguably
Georgescu-Roegen) who argue that once limits on
throughput are established, the market economy
can operate relatively freely to allocate resources
within those established limits. On the other hand,

J.M. Gowdy, A. Ferreri Carbonell / Ecological Economics 29 (1999) 337348

some ecological economists take a more dynamic

approach and argue that growth and increasing
resource use is necessary to a smoothly operating
market system in spite of its long-run ecological
unsustainability. As Daly recognizes, an uncontrolled market will not recognize ecological limits.
A non-growing economy, however, is incompatible with the dynamics of global capitalism. Capitalist accumulation drives both market expansion
and environmental destruction. Along these lines,
Ayres (1995) argues that economic growth is politically necessary but environmentally destructive.
Gowdy and McDaniel (1995) also take the position that fundamental conflicts exist between the
evolution of economic and biological systems. An
issue of Ecological Economics (November 1995)
was devoted to an examination of the topic of
economic growth, carrying capacity and the environment. Other commentaries on economic
growth and the environment include Ekins (1993),
Goodland and Daly (1993), Kaufmann (1995),
Martinez-Alier (1995), Wetzel and Wetzel (1995),
de Bruyn and Opschoor (1997), Lunney et al.
(1997) and Ricker (1997).
The key point here was made forcefully by
Ayres. The market economy is a magnificent machine for calling forth new technologies and new
substitutes for environmental inputs into the production process. The conflict between cowboy
and spacemen (Boulding, 1966) economists is
really between those who see the economic system
as a self-contained and independent entity, and
those who do not. These two groups are talking
about two different systems, the economy and the
natural world. Ayres (Ayres, 1993, p. 195) points
out that neo-Malthusians have traditionally emphasized natural resources only as inputs into the
economic process while spacemen tend to focus
on the entire environmental matrix that supports
all life on the planet:

There are many, including myself, who believe that given a reasonably free market, technology can generally be depended upon to find
a substitute for almost any scarce material resource input (except energy itself). However,
there are no plausible technological substitutes

341

for climatic stability, stratospheric ozone, air,

water, topsoil, vegetationespecially forests
or species diversity. Degradation of most of
these is irreversible. In every case, total loss
would be catastrophic to the human race, and
probably lethal. Although technology can create (and money can buy) many things, it cannot
create a substitute for the atmosphere or the
biosphere. Technological optimism, in this regard, is simply misguided.
An important aspect of consilience is recognizing the difference between economic substitution
and ecosystem functions. Sollner (1997) points out
that the finiteness of the earth may be acknowledged by neoclassical economics but deemed irrelevant because of substitution possibilities. Even
among ecological economists there is a difference
of opinion as to the degree of substitutability of
human-made capital for environmental features
(Victor, 1991; Pearce and Atkinson, 1993; Kaufmann, 1995; Martinez-Alier, 1995; Cabeza-Gutes,
1996; van den Bergh, 1999). Again, as Ayres,
Georgescu-Roegen, Wilson, and numerous others
point out, neoclassical economics seals itself off
from nature and society. In terms of sustainability, all that matters is that discounted per capita
consumption be non-declining, so long as those
consequences do not have economic impacts
which offset the gains of using the environment as
an economic resource (weak sustainability)
(Pearce and Atkinson, 1993).
It is critically important to keep in focus the
difference between sustaining the consumption of
market goods and sustaining environmental processes such as the smooth functioning of ecosystems. The question of how much do biophysical
limits constrain the economic process (Cleveland
and Ruth, 1997; Ruth, 1995) is different from the
question of how much does economic activity
constrain ecological processes. As the fates of
numerous past civilizations show, it is possible to
have a growing population and economy long
after the exhaustion of natural resources essential
to long-term survival. On Easter Island, for example, the population peaked then collapsed more
than 300 years after the last tree had been cut
down (Bahn and Flenley, 1992). Even in open

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J.M. Gowdy, A. Ferreri Carbonell / Ecological Economics 29 (1999) 337348

economies the same pattern of overshot-and-collapse seems to be the rule, not the exception
(Tainter, 1988; McDaniel and Gowdy, 1999). The
time lag between irreversible resource degradation
and the ultimate consequences is one of the most
sobering aspects of the political-economic-environmental nexus.
A simple but frequently forgotten point is that
there is a difference between input substitution in
the production of goods and services, and the
alleged ability to produce substitutes for the atmosphere or biosphere (Ayres, 1993; Ekins, 1993;
Gowdy and McDaniel, 1995; Wetzel and Wetzel,
1995). Consilience implies that the assumptions
incorporated in the economic models and production function should be consistent with physical
reality (van den Bergh and Nijkamp, 1991; Amir,
1994; Ruth, 1995). Ecological Economics has contributed both to the debate on natural resources
and economic output, and to the debate about
economic output and its effect on the natural
world.

3. Utility theory and the natural world

The hermetic nature of production theory has
resulted in the neglect of the scale of the impact of
the economy on the natural world. Neoclassical
utility theory is also hermetic in that it sees decisions made by individuals as independent of
space, time, and the biophysical world. In the
neoclassical theory of the consumer, only human
preferences count. It does not matter where these
preferences come from or what the consequences
for the rest of the world are. The distinction
between use value and exchange value has disappeared in modern economics. As Bromley, (1998,
p. 233) puts it:

Utility, which to Pareto and early economists

signified usefulness, was transformed into the
realm of feeling, thus displacing the more awkward term ophelimity. And now there is no
longer a place in economic discourse for the
concept of usefulness. So the province of sustainability must, if it is to be true to the pre-

cepts of received dogma, concern not usefulness

to future generations, but their level of welfare.
In blunt terms, the atmosphere must be useful
for future generations to be able to breathe but
because future generations will otherwise suffer
a loss in utility.
In the standard economic view, essential features of the natural world, such as biological
diversity, have value only if humans think they
do. In neoclassical utility theory only human feelings count. There is no reality outside of human
perceptions so there is no need to consider the
effects of consumption on the environment. If we
believe, however, that humans are a biological
species which has evolved in a very specific and
very complex physical environmentwithin certain limits of atmospheric composition, temperature, and ecosystem featuresthen to focus solely
on human preferences is a dangerous approach to
environmental policy. There are many things we
do not place great positive value onmicrobes
and insects, for examplethat are absolutely essential to our survival. Klaassen and Opschoor
(1991) point out that from an evolutionary perspective, in order to protect future biodiversity,
we may want to preserve an ecosystem even if it
has no apparent economic benefit.
Ecological economists have tried to bring the
economic theory of the consumer closer to biophysical reality. Soderbaum (1994) argues that
willingness to pay represents human feelings
which may or may not adequately reflect the
importance of environmental features, for example, in maintaining life-support systems. If the
lifestyles and preferences of people are unsustainable, then willingness-to-pay measures for environmental features will only reflect these
unsustainable consumption practices, not ecological integrity. Norgaard (Norgaard, 1989a p. 308),
makes a similar argument: if people are not very
willing then the environment is not very valuable.
Soderbaum (1994) and Norton et al. (1998) make
the case that preferences should also be seen as an
environmental policy instrument, not as given and
unchangeable as neoclassical economics presents
it (Stigler and Becker, 1977). Reconciling economic theory with the basic findings of modern

J.M. Gowdy, A. Ferreri Carbonell / Ecological Economics 29 (1999) 337348

psychology remains an important task for ecological economists.

The thorny issue of ecosystem valuation and
evaluation, and the contradictions between the
rules of market behavior and the rules which
govern ecosystems is far from being resolved.
Nevertheless, Ecological Economics has provided
a forum for the discussion of this issue from all
sides (see, for example, the special issue of Ecological Economics on issues in ecosystem valuation:
improving information for decision making August 1995). A reflection of the importance of this
controversy is the article in Nature by Costanza et
al. (1997). The article was the cover story and has
had an enormous impact in the media with stories
appearing in Science, The New York Times, and
US News and World Reports. A special issue of
Ecological Economics (April 1998), The value of
ecosystem services was devoted to the study of
the issues surrounding it. A particularly useful
paper in that issue was that of Turner et al. (1998)
which sets out a protocol for the economic valuation of environmental attributes. More critical
commentaries are presented by Ayres (1998),
Hueting et al. (1998), Rees (1998) and Toman
(1998). The impact of the Nature article shows the
increasing importance of Ecological Economics,
probably as a consequence of the public awareness of environmental problems.
There have been also other diverse contributions of Ecological Economics to ecosystem valuation and evaluation issues. A major valuation
issue has been the appropriateness or not of using
monetary indicators market prices or willingness
to pay (WTP) or to accept (WTA) measures to
value environmental resources and functions and
the use of Cost-Benefit Analysis (CBA). While
some authors have defended monetary valuation
methods, others have criticized such instruments
and methods for a variety of reasons: individuals
have lexicographic preferences and so they cannot
express WTP since they refuse to make a tradeoff (Spash and Hanley, 1995 p. 191), valuation
depends on the distribution of income and property rights endowment (Lintott, 1996; MartinezAlier and OConnor, 1996), the omission in
cost-benefit analysis of impacts that cannot be
easily monetized (Schulze, 1994; Sagoff, 1998), the

343

incommensurability of values (Munda, 1996).

Also important is the fact that valuation depends
not only on economic and biological functions
but also on the institutional context (Freeman,
1991; Opschoor and van der Straaten, 1993).
While many ecological economists have been
critical of WTP measures, contributions have also
been made indicating the context in which these
measures can legitimately be employed. Bateman
et al. (1995), for example, report results of the
effects of altering the methods of eliciting willingness-to-pay responses. They recommend an iterative bidding procedure which has the effect of
greatly reducing protest bids.
Criticisms of standard valuation methods have
led to the proposal of various methods of valuation and evaluation that differ from conventional
cost-benefit analysis and which incorporate concepts like uncertainty, irreversibility, complexity
and the incommensurability of wants. These alternatives include valuation and evaluation methods
such as: procedural rationality in environmental
decision-making (Faucheux and Froger, 1995),
multi-criteria analysis (van Pelt, 1993; Munda et
al., 1995; Joubert et al., 1997), dynamic ecological-economic modeling (Liu et al., 1994; Ruitenbeek, 1994; Higgins et al., 1997; Weston and
Ruth, 1997), sustainable development records
(Bergstrom, 1993), integrated value theory (Lockwood, 1997), and discursive ethics (OHara, 1996).
Funtowicz and Ravetz (1994) propose that some
of these methods are part of a new paradigm of
post-normal science where the old reductionist
scientific procedures which ignore uncertainty and
evolutionary context are no longer valid.
Other important evaluation and management
issues include the inappropriateness of marginal
pricing for biodiversity (Gowdy, 1997), species
extinction and market prices (Farrow, 1995), and
within-species diversity, a valuable part of ecosystems, but a property difficult if not impossible to
adequately capture in prices.

4. Evolutionary concepts in economics

The application of analogies from evolutionary
theory in biology to ecological economics has also

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J.M. Gowdy, A. Ferreri Carbonell / Ecological Economics 29 (1999) 337348

been important in making economic theory more

realistic. One of the most limiting features of
neoclassical theory is that it is static. It is a system
of rules for allocating a fixed amount of goods
among consumers with given tastes and among
firms with given production techniques. An important area of reconciliation between biology
and economics is the greening of economic theory to incorporate irreversible change, contingency, and pure uncertainty.
Although evolutionary theory and concepts
have a long history in economics, most
economists have used evolutionary theory only to
justify the neoclassical model. Recently, however,
ecological economists have incorporated new developments in evolutionary theory such as multilevel selection, path dependency, and coevolution
(Norgaard, 1989b, 1994; Gowdy, 1994, 1997;
Norton et al., 1998). Co-evolutionary economics
considers not only the evolutionary process but
also emphasizes the relationships and inter-dependence between the natural, social and economic
systems.
Evolutionary or co-evolutionary economic concepts are extensively used by ecological
economists. Examples are the co-evolution of cultural and physical and genetic systems (Ring,
1997), and sustainable development as an evolutionary process with continuous feedbacks between a changing economy and environment
(Klaassen and Opschoor, 1991). A number of
contributions by ecological economists emphasize
the evolution of institutions. Norton et al. (1998)
stress the importance of economic and cultural
evolution within an institutional framework. They
point out that it is impossible to address the
questions of preferences and values, and the scale
of economic activity, within the static framework
of neoclassical economics. Mohr (1994) uses an
evolutionary framework to describe changing environmental norms. He refers to Sugden (1986)
who argues that norms spread by analogy (instead
of sexual reproduction) and that the institution
reinforces a variety of norms, for example, separating insiders and outsiders (Mohr, 1994, p. 235).
He also points out that norms need to be based
on common knowledge, which acts as a constraint
for their diffusion.

5. Insights from economics to ecology

The influence of economics on biology and
ecology has a long history. Both Charles Darwin
and Alfred Russel Wallace developed their ideas
of evolution through natural selection after reading the economic texts of Thomas Malthus describing competitive markets (Hodgson, 1993).
Economic concepts have been applied in ecology
since the beginning of this century (Rapport and
Turner, 1977) and optimization models based on
economic theory have been widely used by biologists (Maynard Smith, 1978).
Ecological Economics has provided a forum for
biologists and economists to work together on a
number of theoretical and practical issues. Biologists have successfully applied a number of economic concepts to ecological problems. Perrings
and Walker (1997) use a model of constrained
optimization to examine three rangeland variables, woody plants, grasses, and livestock. They
develop a model of optimal management taking
into account exogenous shocks, the existence of a
number of state possibilities, and creative destruction in the form of fire disturbance. Norton
(Norton, 1995a,b) also discusses the importance
of resilience in environmental management. He
argues that the neoclassical economic concept of
weak sustainability is a poor guide to protect
biological resilience and also argues for the use of
dynamic, multi-equilibrium models in ecosystem
management. In a pioneering attempt to integrate
economic and ecological information, Bockstael
et al. (1995) present a model for the Patuxent
River drainage basin in Maryland which directly
addresses the methodological and conceptual
conflicts between ecological and economic valuation schemes. Hannon (1998) presents an interesting application of economic accounting principles
to examine the question: How might nature value
man?
A number of economic notions such as property rights and debt-for-nature swaps have been
applied by ecological economists (Chambers et
al., 1994; Kling, 1994; Lant, 1994). Most of the
articles in Ecological Economics applying economic concepts to ecosystems are written exclusively by economists. There is nothing wrong with

J.M. Gowdy, A. Ferreri Carbonell / Ecological Economics 29 (1999) 337348

this per se but it would be nice to see more

contributions from biologists such as Walker (Perrings and Walker, 1997) and Luks (1998) who are
also well-versed in economics.
One area of interdisciplinary collaboration has
been fisheries management. Spurred by the collapse
of several of the worlds major fisheries (Ruitenbeek, 1996), there seems to be an emerging consensus that the old dichotomy of private property
versus government ownership is a false one. Susan
Hanna (Hanna, 1997) calls for the development of
new institutional capital to make the transition
from a frontier to a commons approach to
fisheries management. Components include (1) a
conception of the fishery as an integrated ecosystem, (2) identification of shareholders and the
development of decision-making processes that
include all relevant interests, (3) incentive structures that promote long-term stability include
adaptability to change. Charles (1994) is critical of
the rationality paradigm and also calls for a
multiple objective approach to fisheries management integrating ecological, social, and economic
concerns. Powell (1998) makes a similar case in a
discussion of communal land tenure policies in the
South Pacific.
One of the most intractable issues in integrating
economics and biology is that of discounting the
future. Discounting has been a central topic for
discussion in the valuation arena in Ecological
Economics (Hueting, 1991; Schulze, 1994; Azar and
Sterner, 1996; Martinez-Alier and OConnor, 1996;
Rabl, 1996) and can only be briefly mentioned here.
The question of discounting involves ethics, equity,
and the conflicting time-scales of economies and
ecosystems, among other issues. In the case of
biological features the issue of discounting is intertwined with the issue of substitutability. If natural
and manufactured capital are substitutes, then the
Harwick-Solow rule for sustainability is appropriate and the discounting problem is solved by the
non-declining capital stock criterion (see Bromley
1998).

6. Concluding thoughts
Science has entered the age of the breakdown of

345

disciplinary boundaries. For some sciences this

transition is going smoothly, for others it is not.
For the natural sciences, perhaps, the change is
relatively easy because it does not involve a rethinking of basic assumptions. The integration of
economics with the physical and biological sciences
has proved far more difficult. For a variety of
reasons, the economics profession has been particularly guilty of parochialism and resisting ideas
which challenge its core assumptions. This resistance to change is partly due to a justified pride in
being unique among the social sciences in having
a well-developed mathematical framework to explain market exchange, partly due to its role in
justifying existing power and privilege relationships, and partly due to the ability of the theory to
insulate itself from empirical tests of its basic
assumptions. The last point is critical to the above
discussion. Although empirical analysis is one of
the defining characteristics of neoclassical economicseconometricians are held in the highest esteem
in the professionanalysis is usually formulated in
ways that accept the basic premises of neoclassical
theory. But in fact, as discussed above, when basic
assumptions such as transitivity, smooth and continuous indifference curves and isoquants, and
substitution for natural and manufactured capital,
are empirically tested, they frequently fail to hold
true.
Ecological economics has played a valuable role
in putting economics on a firm footing with respect
to biological reality. We argue above that this is
because ecological economics has taken interdisciplinarity seriously. Following the traditional division of economics into consumption and
production, ecological economics has helped
ground the consumer in social and ecological
context, and to ground the firm in biophysical
reality.

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